GlossarEverything at a glance
The IZ Research Glossary offers definitions of structural and market data on IZ Research Cities at a glance. The glossary is currently under preparation and will be updated on an ongoing basis.
Contents
1. Structural Data
The definitions of the structural data were taken from original sources, the Destatis glossary and the regional statistical data catalogue of the Federal and State governments (RegioStat), and are quoted below. We obtain some data, which the official statistics do not provide at municipality level, from our cooperation partner Nexiga GmbH, whose data definitions we also quote here.
1.1 Economics & Taxes
Gross Value Added Gross value added is calculated by deducting prepayments from production values; it therefore only includes the added value created in the production process. Gross value added is valued at production prices, i.e., without the taxes payable on the goods (goods taxes), but including subsidies on products received. (Source: Statistical Offices of the Federal Government and the Federal States 2019). The gross value added shown on IZ Research is shown both as a total amount in millions of euros and differentiated by economic sector. The economic sectors are classified by Nexiga GmbH on the basis of the Classification of Economic Activities. (Source: WZ 2008). Property Tax Property tax A is levied on the ownership of agricultural and forestry land. Property tax B is levied on the ownership of undeveloped and developed land. The amount of the revenue from this is essentially determined by the assessment rates, which each municipality can determine itself. (Source: Destatis 2020). Trade Tax The trade tax (also referred to as real or property tax) regulated in the Trade Tax Act is the most important source of revenue for the municipalities and thus belongs to the so-called municipal taxes. The tax assessment rate is set independently by the municipalities, thus the amount of tax to be paid differs from municipality to municipality. “The subject of trade tax is the business enterprise and its objective earning power (operating profit). Every trade business is subject to trade tax if it is operated in Germany. A trade is understood to be a commercial enterprise within the definition of income tax law. An activity which is to be regarded as the exercise of agriculture and forestry or as the exercise of a freelance profession or other self-employed work is not subject to trade tax. (Souce: Destatis 2020) Real Tax Real taxes include property tax and trade tax. For each type of real tax and for each municipality, the basic amount is calculated according to the following formula: Actual revenue / tax rate* 100 (Source: Destatis 2020) Real Tax Revenue The real tax revenue indicates how high the real tax revenue would have been in the individual municipalities if all municipalities had applied the national weighted average assessment rate for each of the individual real tax types. This is therefore a hypothetical value. (Source: Destatis 2020 and Thuringia Statistics, https://statistik.thueringen.de)Municipality share in income tax
The municipalities receive a share of 15 per cent from the revenue of wage and income tax and, from 1993 onwards, twelve per cent from the interest deduction, which is divided among the municipalities according to a key (key figures). In general, the actual amounts are shown. Only for the purposes of the real tax comparison are the figures shown according to the final accounts. (Source: Destatis 2020 and Thuringia Statistics, https://statistik.thueringen.de) Municipality share in value-added tax Compensation introduced in 1998 for municipalities in the new German federal states that did not introduce the trade capital tax or which abolished the trade capital tax of 2.2 per cent of the revenue from value-added tax in the former federal territory. The amount due to the respective federal state is distributed among the municipalities by means of a key (key figures). In general, the actual amounts are shown. Only for the purposes of the real tax comparison are the figures shown according to the final accounts. (Source: Destatis 2020 and Thuringia Statistics, https://statistik.thueringen.de) Strength of revenue from taxes This is the strength of revenue from real taxes increased by the municipal shares in income tax and value-added tax and reduced by the trade tax allocation. (Source: Destatis 2020) Wage and income taxable persons “The taxable unit is the natural person with unlimited/restricted tax liability who is recorded and verified as a taxable person, namely:- as a single person (this also includes a child living in the parents’ household with their own income or married couples or persons in registered civil partnerships who are taxed separately)
- as a married couple or persons in a registered civil partnership who are taxed jointly (a married couple/persons in a registered civil partnership = one taxpayer).”
1.2 Population & Households
Population Forecasts
Nexiga prepares a forecast of the population figures for each of the years 2025, 2030 and 2035, based on official data for regional population projections and forecasts of the Federal Statistical Office (source: Nexiga GmbH). For the population forecast, empirica regio uses a calibrated population forecast of the State Statistical Offices with the base year 2020 for all districts and independent cities and with a forecast horizon up to 2035. For this purpose, empirica regio has harmonised the existing state forecasts and the underlying assumptions on internal migration. The result is a lower, medium and high growth scenario. The empirica forecast for the year 2035 in the lower variant almost corresponds to the level of the 14th Coordinated Population Forecast Variant 1 (G2-L2-W1) and in the upper variant approximately to Variant 3 (G2-L2-W3). The regional distribution of inhabitants across the 400 districts, on the other hand, is based on the federal state projections in all years. (Source and further information on the methodology: empirica regio/ empirica housing market forecast 2022/2023)Population Density
Number of inhabitants of a municipality (includes all persons having their sole or main residence in this municipality, in each case as of 31.12.) by municipality area or territory area in km² (Source: Statistical Offices of the Federal Government and the Federal States 2019). We calculate the population density on the basis of the total number of inhabitants divided by the area of the total territory of a municipality or city.Total Inhabitants
The number of inhabitants (also population) of a municipality includes all persons who have their sole or main residence in this municipality, in each case as of 31.12. (Source: Statistical Offices of the Federal Government and the Federal States 2019).Total inhabitants according to age groups
Inhabitants who have their sole or main residence in this municipality, in total and in absolute values, as of 31.12., differentiated according to the following five age groups: 0-14 years, 15-24 years, 25-49 years, 50-64 years, 65 years and older. (Source: Statistical Offices of the Federal Government and the Federal States 2019).Inhabitants (Female)
Female inhabitants who have their sole or main residence in this municipality, in total, as of 31.12., differentiated according to the following five age groups: 0-14 years, 15-24 years, 25-49 years, 50-64 years, 65 years and older. (Source: Statistical Offices of the Federal Government and the Federal States 2019).% Share Inhabitants (Female)
The relative value reflects the share of female inhabitants in the number of inhabitants in the respective age groups – as of 31.12 – grouped according to the following five age groups: 0-14 years, 15-24 years, 25-49 years, 50-64 years, 65 years and older. (Source: Statistical Offices of the Federal Government and the Federal States 2019).Inhabitants (Male)
Male inhabitants who have their sole or main residence in this municipality, in total, as of 31.12., differentiated according to the following five age groups: 0-14 years, 15-24 years, 25-49 years, 50-64 years, 65 years and older (Source: Statistical Offices of the Federal Government and the Federal States 2019).% Share Inhabitants (Male)
The relative value reflects the share of male inhabitants in the number of inhabitants in the respective age groups – as of 31.12 – grouped according to the following five age groups: 0-14 years, 15-24 years, 25-49 years, 50-64 years, 65 years and older. (Source: Statistical Offices of the Federal Government and the Federal States 2019).Households
Total number of households
A private household is any community of persons living together and forming an economic unit, as well as persons living alone and forming an economic unit. Accordingly, shared flats and subtenancies are not counted as households. Households with several residences are counted multiple times (Source: Statistical Offices of the Federal Government and the Federal States 2019).Average size of household
The average household size indicates how many persons live together in such a unit. Therefore, it is the quotient of the number of inhabitants by the number of households.Households Forecast
Empirica regio generates a households forecast based on the population forecast. After deducting subtenant households and adding the demand for second homes, this results in the number of households in demand for housing. The increase in the number of households requiring housing then describes the additional demand for housing caused by changes in the number of inhabitants, household sizes and the age distribution of households. The forecast of households as a whole is presented at municipality level. The household forecast, differentiated by 1, 2, 3 and more person households, is available at the district level as well as for the independent cities and is calculated as a lower, medium and high growth scenario. (Source and further information on methodology: empirica regio/ empirica housing market forecast 2022/23).Population Change
Live Births
Live-born children are children in whom either the heart has beaten or the umbilical cord has pulsated or natural lung respiration has started after they have been separated from the mother’s womb.Deaths
Deaths are those who died during the reporting period, excluding stillborn children, subsequently certified war deaths and without judicial declarations of death.Migration
We map migration overall and according to the following five age groups: 0-14 years, 15-24 years, 25-49 years, 50-64 years, 65 years and older. (Source: Statistical Offices of the Federal Government and the Federal States 2019).Influxes
An influx is deemed to occur when someone moves into a sole dwelling or main dwelling in a municipality in which he or she is not already registered with a sole dwelling or main dwelling and registers there (Source: Statistical Offices of the Federal Government and the Federal States 2019).Outflows
An outflow is deemed to have occurred when a person moves within the federal territory and this move is deemed to be an inflow in the municipality in which he or she registers, or when someone deregisters from a municipality in the federal territory to a foreign country without still being registered with another dwelling in the Federal Republic of Germany (Source: Statistical Offices of the Federal Government and the Federal States 2019).Net Migration
Difference between influxes and outflows. The net migration can be considered as a whole or subdivided according to age or gender (Source: Statistical Offices of the Federal Government and the Federal States 2019).Population Change
Population change is the result of natural population change (births and deaths) and migration (influxes and outflows) (Source: Statistical Offices of the Federal Government and the Federal States 2019).1.3 Labour Market & Employment
Employees subject to social security
Persons who fulfil all of the following criteria are considered employees subject to social security contributions: An employer’s social security declaration has been submitted. The employment is subject to compulsory insurance in at least one of the following categories of social insurance (Pension insurance, health insurance/nursing care insurance, unemployment insurance). Employment is deemed to be dependent employment or work that is generally remunerated (exceptions are cases of interruption, e.g., parental leave). At least one hour per week is worked – as far as can be identified from the definition of the group of persons. This also includes persons who are called up from employment subject to social security contributions to perform statutory service obligations (e.g., military service). The results are based on evaluations from the employment statistics of the Federal Employment Agency. (Source: Statistical Offices of the Federal Government and the Federal States 2019).Employees at the place of work
When verifying the number of employees subject to social security contributions according to the place of work principle, the employees are assigned to the municipality in which the enterprise in which they are employed is located. Employees with identical place of residence and place of work + incoming commuters + employees without information on place of work and/or place of residence = number of employees according to the place of work principle. (Source: Statistical Offices of the Federal Government and the Federal States 2019).Employees at the place of residence
The verification of employees subject to social security contributions according to place of residence is based on the information provided by employers or registration authorities. Employees with identical place of residence and place of work + outgoing commuters + employees without information on place of work and/or place of residence = number of employees according to the place of residence principle. (Source: Statistical Offices of the Federal Government and the Federal States 2019).Commuters
Commuters are all employees subject to social security contributions whose municipality of work differs from the municipality of residence. Whether and how often commuting takes place is irrelevant. The municipality of residence can also be abroad. Due to the domestic concept of the employment statistics, only incoming commuters from abroad can be verified; outgoing commuters to foreign countries, however, cannot. Commuters are a subset of the total current number of employees subject to social insurance contributions on the respective reference date. Commuters are differentiated according to incoming and outgoing commuters. Incoming Commuters: Are persons who do not live in their working municipality. Outgoing Commuters: Are persons who do not work in their municipality of residence. Commuter Balance: The difference between incoming and outgoing commuters produces the commuter balance. (Source: Statistical Offices of the Federal Government and the Federal States 2019).Office Work Places
Availability of jobs in offices in the indicated region (Source: Nexiga GmbH).Unemployed Persons
According to § 16 Unemployed Persons (SGB III), “unemployed persons (…) are persons who are temporarily not in employment or are only in employment for less than 15 hours a week, are seeking employment subject to compulsory insurance and for at least 15 hours a week, are available to the placement efforts of the Employment Agency or the Job Centre, i.e. are allowed to work, are able and willing to work, live in the Federal Republic of Germany, are not younger than 15 years of age and have not yet reached the age limit for retirement, have personally registered as unemployed with an Employment Agency or a Job Centre. For persons in need of assistance under Book II of the Social Code, the definition of unemployment in Book III of the Social Code, Section 16, applies as appropriate in accordance with Section 53a (1) of Book II of the Social Code. (Source: Statistical Offices of the Federal Government and the Federal States 2019) “The unemployment statistics of the Federal Employment Agency (BA) are obtained from the business data of the employment agencies and the providers of basic benefits for jobseekers. Over time, changes in social legislation as well as in the organisation of the social administration have an influence on the level of unemployment figures. Data revisions can lead to deviations compared to evaluations with an earlier compilation date.” (Source: Statistical Offices of the Federal Government and the Federal States 2019).Unemployment Rate
Unemployment rates (in %) indicate the relative underutilisation of labour supply by relating the registered unemployed to the labour force (Source: Destatis 2020). Due to the lack of availability of data on the labour force at the municipality level, we calculate the unemployment rate as follows: Unemployment rate = unemployed / (employees subject to social security at place of residence + unemployed) *100.Office Employment Rate
The office employment rate – an important indicator for determining the local demand for office space – indicates the percentage of employees subject to social insurance contributions who work in an office at their place of work. This makes it possible to derive the number of office workplaces required and, from this, the demand for office space in the respective city. With the help of the so-called “Classification of Occupations 2010” (KldB 2010)1 the number of office workers subject to social security contributions at their place of work can be estimated. The classification is published by the Federal Employment Agency and includes the allocation of employees subject to social insurance contributions to groups according to “occupational specialisation” and “job skill level”. Occupational specialisation refers to occupations that require similar activities, knowledge and skills. The job skill level defines four levels of complexity of the activities to be performed starting with “supportive and semi-skilled activities” up to “highly complex activities”. (Source: Statistics of the Federal Employment Agency) Based on this, we determined the degree of probability of needing an office workplace for each occupational group in terms of the expertise and complexity of the activity as a factor. Multiplying the number of employees subject to social insurance contributions by these factors produces the number of office workers in the respective occupational group at the respective location. Civil servants and self-employed persons are not included here. The classification of occupations (KldB) is regularly adjusted by the Federal Employment Agency so that new occupational profiles can also be taken into account. It also corresponds to the International Standard Classification of Occupations 2008 (ISCO-08). Since the reporting year 2021, the Federal Employment Agency has developed the system further, now using two new occupational subgroups and 14 new occupational categories, so that the KldB currently comprises 16 occupational fields to which all recognised apprenticeship and university degree occupations can be assigned. For more information on the methodology of the Classification of Occupations 2010, please go to https://statistik.arbeitsagentur.de/DE/Navigation/Grundlagen/Klassifikationen/Klassifikation-der-Berufe/KldB2010-Fassung2020/KldB2010-Fassung2020-Nav.html1.4 Use of Space
The area assessment refers to the areas of the territorial status of a municipality defined according to the type of actual use. The following definitions (as of January 2019) are taken from the Regional Statistical Catalogue of the Statistical Offices of the Federal Government and the Federal States 2020.Total Territorial Status in km²
Area of a municipality referring to the reference date 31.12. of a year (Source: Statistical Offices of the Federal Government and the Federal States 2019).Ground Area (in ha)
The ground area of a regional unit (e.g., municipality, non-municipal area, district) is made up of all land lying within the defined boundaries of this area. Since 2016, the Official Cadaster Information System (ALKIS) has provided the basis for the survey of land by type of actual use. The type of use area settlement includes the developed and undeveloped areas that are characterised by or contribute to the settlement of people (Source: Statistical Offices of the Federal Government and the Federal States 2019).Residential Area (in ha)
Residential building area is a built-up area including the open spaces associated with it (e.g., front gardens, decorative gardens, driveways, parking spaces), which is used exclusively or predominantly for residential purposes. (Source: Statistical Offices of the Federal Government and the Federal States 2019).Commercial, Industrial Area (in ha)
Industrial and commercial land is land that is predominantly used for industrial or commercial purposes. In addition to industrial and commercial land, this includes land for trade and services as well as land for supply and disposal facilities. (Source: Statistical Offices of the Federal Government and the Federal States 2019).Recreational Space (in ha)
Sports, leisure and recreation area is a developed area, including the associated open space, which is used for the pursuit of sports, leisure activities or recreation. (Source: Statistical Offices of the Federal Government and the Federal States 2019).Green Area (in ha)
Green space is an area that is predominantly used for recreation, to enhance the appearance of the locality or to display plants (e.g., botanical gardens). (Source: Statistical Offices of the Federal Government and the Federal States 2019).Cemetery Area (in ha)
Cemetery is an area that serves or has served for burial, unless the allocation to “green space” is more appropriate. Cemetery forests are assigned to the use type “forest” (Source: Statistical Offices of the Federal Government and the Federal States 2019).Roads, Paths and Squares (in ha)
Road traffic includes all areas required for the road as a built structure and the developed and undeveloped areas used for road traffic. Paths include all areas which are intended to be driven on and/or walked on. The path area also includes verges and ditches for path drainage. Squares are traffic areas in built-up areas or flat, paved or unpaved areas that serve specific purposes (e.g., for traffic, parking, markets, festive events). (Source: Statistical Offices of the Federal Government and the Federal States 2019).Agricultural Area (in ha)
Agricultural land is land used for the cultivation of crops and land that can be grazed and mown, including land cultivated with special crops (Source: Statistical Offices of the Federal Government and the Federal States 2019).Forest Area (in ha)
Forest is an area planted with forest plants (forest trees and shrubs) (Source: Statistical Offices of the Federal Government and the Federal States 2019).Bodies of Water (in ha)
The range of use type for bodies of water includes areas covered by water (Source: Statistical Offices of the Federal Government and the Federal States 2019). Forest is an area planted with forest plants (forest trees and shrubs) (Source: Statistical Offices of the Federal Government and the Federal States 2019).
For the definition of office market data, IZ Research follows the guidelines for office market reporting (2015) from the gif (Gesellschaft für Immobilienwirtschaftliche Forschung e.V./ Association for Real Estate Economic Research), which is to be seen as a standard definition catalogue of office market indicators for the German real estate market. However, we would like to point out that depending on the data provider, the calculation basis of the market segment and/or the calculation method may differ from the gif definition. In this context, we refer in each case to the cited source.
2.1 Prime Rent
According to the definition of gif e.V., prime rent refers to achievable new rental contracts (not existing rental contracts). It is calculated on the basis of an achievable nominal rent (contractually agreed initial rent, not taking into account ancillary costs, incentives or local taxes) and relates to a high-quality rental area of at least 500 m² in size (300 m² in B locations) in the best submarket at the reporting date/period. It is reported in square metres of rental space according to the gif definition on a monthly basis in euros per square metre. In order to interpret the market situation in the upper price segment, the achieved prime rents can also be mapped. The achieved prime rent comprises the top price segment – in relation to the respective market area – with a market share of around 3% of the rental turnover (excluding owner-occupiers) in the past 3/6/9/12 months, depending on which period is to be considered, and represents the median of the rental prices of the corresponding reporting period. At least three contracts are to be included in the calculation, even if this means that the 3 % limit may be exceeded. The prime rent is intended to reflect the development in the prime segment of the market, even if no rental contracts were signed in the top price segment during the reporting period, i.e., it can be estimated on the basis of the achieved prime rent if no such contracts were signed during the reporting period. When publishing achievable prime rents, it should be noted that these may not be rent levels achieved on the market. (Source: https://www.gif-ev.de/gif-glossar/show/glossar-bueromarkt) Depending on the data provider, the calculation basis of the market segment and/or the calculation method differ from the gif definition. In this context, we refer in each case to the definition of the cited source.2.2 Average Rent
The achieved average rent is the area-weighted average rent across all new rental contracts concluded in a defined (sub)market. To calculate the average rent, the individual nominal rents of all new rental contracts concluded in a defined period are weighted with the respective area rented and the average value is calculated from these values. The average is only formed if the contracts recorded with area and rent for the calculation represent at least 75 % of the take-up (excluding owner-occupiers) in a market. (Source: https://www.gif-ev.de/gif-glossar/show/glossar-bueromarkt) Depending on the data provider, the calculation basis of the market segment and/or the calculation method differ from the gif definition. In this context, we refer in each case to the definition of the cited source.2.3 Rents Range
It describes the range between the lowest and the highest rent in a defined (sub)market and is based both on the rental contracts concluded in a period and on the market view of the local rental departments of the data providers. The upper end of the range is also the maximum rent (= individual values above the prime rents in non-reproducible areas are referred to as maximum values). (Source: https://www.gif-ev.de/gif-glossar/show/glossar-bueromarkt). Depending on the data provider, the calculation basis of the market segment and/or the calculation method differ from the gif definition. In this context, we refer in each case to the definition of the cited source.2.4 Prime Yield
The term yield in this context corresponds to the net initial yield and puts the net rental revenue in relation to the gross purchase price (= purchase price incl. incidental acquisition costs). It is an extension of the gross initial yield and is expressed as a percentage. The prime yield describes the value of a building of the highest quality, usually a new building, in a prime location (usually in a central city location), if the building is fully rented to top tenants on a long-term basis at the current prime rent. (Source: https://www.gif-ev.de/gif-glossar/show/glossar). Depending on the data provider, the calculation basis of the market segment and/or the calculation method differ from the gif definition. In this context, we refer in each case to the definition of the cited source.2.5 Vacancy
According to gif e.V., vacancy is the sum of all office space that is available for letting, subletting or sale (for the purpose of continued use) at the time of the survey and may be ready for occupancy within three months. In addition, office space that is still under construction and may be ready for occupancy within three months is taken into account. Unused space for which only a general rental contract has been concluded is also included in the vacancy rate. This is office space that is available at short notice. A further distinction is made between the so-called structural vacancy, which includes all office space that has been vacant for at least three years. The allocation to vacant structural space is independent of the age, equipment and location of a building and includes both individual floors/areas of an otherwise occupied property as well as entire buildings. The base vacancy is a subset of the office vacancy of a market. As such, it can also be reported separately in market reports. (Source: https://www.gif-ev.de/glossar) Depending on the data provider, the calculation basis of the market segment and/or the calculation method differ from the gif definition. In this context, we refer in each case to the definition of the cited source.2.6 Vacancy Rate
The vacancy rate represents the percentage ratio of all vacant space in a unit (property, city, region, etc.) to the total office space currently available. The rate can thus refer to an entire city, a region or the whole of Germany. Here the vacancy rate for a specific point in time refers to a specific market sector (city and/or sub-sector). (Source: https://www.gif-ev.de/glossar) Depending on the data provider, the calculation basis of the market segment and/or the calculation method differ from the gif definition. In this context, we refer in each case to the definition of the cited source.2.7 Space under Construction
Office space under construction includes space that is currently in the development phase (from the start of ground works). Pre-marketed rates can be shown for such space as part of market reporting (these also include space that may be ready for occupation within three months). All space that is under construction but may be ready for occupation within the next three months already counts as office space supply and, if not rented out, is also included in the vacancy rate. (Source: https://www.gif-ev.de/glossar) Depending on the data provider, the calculation basis of the market segment and/or the calculation method differ from the gif definition. In this context, we refer in each case to the definition of the cited source.2.8 Construction Completions
Construction completions are defined as the completions of the office construction measures defined under building permits. Depending on the data provider, the calculation basis of the market segment and/or the calculation method differ from the gif definition. In this context, we refer in each case to the definition of the cited source.2.9 Take-up
Take-up is the sum of all space newly rented, sold to owner-occupiers or constructed by owner-occupiers for themselves in a defined (sub)market for office properties within a certain time period. For the recording of rental revenue, the date of the conclusion of the contract applies, even if this is conditional, if applicable, and is not the tenant’s move-in date. It does not matter whether the space is ready for occupancy or first has to be developed or constructed. This also applies to any condition’s precedent stated in the contract. For the recording of owner-occupied space, the date of conclusion of the contract applies, provided it is the purchase of an existing office building or one under construction. In the case of project developments for own use, the actual start of construction is decisive for the definition of take-up (start of ground work). Special features which apply to the definition of take-up: For take-up, (sub)rentals within principal rental agreements or owner-occupied properties are also to be included. Interim rentals count as take-up. Rental contract extensions are only recorded as take-up if the rented office space is larger than the space previously used. In this case, only the renting of the additional rental space is taken into account as take-up. In the case of relocations within a building, only the additional rented space is counted as take-up. The following circumstances are not counted as take-up: Beyond the exceptions mentioned above, the extension or renewal of existing rental agreements is not counted as take-up. Also, in the case of refurbishments where the occupant(s) temporarily leave the building and return to the original building upon completion of the refurbishment, the return is not counted as take-up (but rather interim rentals) Take-up does not include space that was already rented by the new owner before the purchase, as well as sale and leaseback transactions. Likewise, general rental contracts are not recorded as take-up. Also, any bogus turnover that may arise for owner-occupiers/tenants as a result of restructuring, spin-offs, rebranding, etc. is not recorded as office take-up. However, extension or renewal of office rental contracts can be recorded and published as a separate category. (Source: https://www.gif-ev.de/glossar, Guidelines for office market reporting, gif Gesellschaft für Immobilienwirtschaftliche Forschung e. V., Juli 2015) Depending on the data provider, the calculation basis of the market segment and/or the calculation method differ from the gif definition. In this context, we refer in each case to the definition of the cited source.3.1 Prime Rent
The prime rent in the retail sector describes the maximum sustainable nominal rent (net rental price excluding ancillary costs, incentives and local taxes) for new rental in a high-quality ideal retail space in a prime location. It is based on the evaluation of the rentals registered during a defined period (usually per quarter). (According to gif Gesellschaft für Immobilienwirtschaftliche Forschung e. V., Definitions for Retail Analysis 2014) The respective ideal space as well as the spatial delimitation of a prime location is defined differently depending on the data provider. In this context, we refer in each case to the definition of the cited source.3.2 Prime Yield
Assuming specific incidental acquisition costs and non-apportionable management costs, the prime rent is calculated into a net initial yield (prime yield). (According to gif Gesellschaft für Immobilienwirtschaftliche Forschung e. V., Definitions for Retail Analysis 2014)3.3 Purchase Price Factor
The factor of a retail property is calculated by dividing the purchase price by the annual net base rent i.e., rent excluding ancillary costs. (According to gif Gesellschaft für Immobilienwirtschaftliche Forschung e. V., Definitions for Retail Analysis 2014)3.4 Take-up Retail
The retail space take-up describes the total of all newly rented spaces within the period under consideration (time of the conclusion of the rental contract) or market sector. Rental contract extensions are not recorded as take-up. (According to gif Gesellschaft für Immobilienwirtschaftliche Forschung e. V., Definitions for Retail Analysis 2014) Depending on the data provider, the calculation basis of the market segment and/or the calculation method differ from the gif definition. In this context, we refer in each case to the definition of the cited source.3.5 Pedestrian Footfall
Pedestrian frequencies reflect the number of people who are on foot in a shopping street on fixed reference days during a defined period and were recorded in the course of a census. As indicators of sales opportunities, frequency data are important indicators of sales opportunities, especially for retailers who rely on pedestrian traffic. (According to gif Gesellschaft für Immobilienwirtschaftliche Forschung e. V., Definitions for Retail Analysis 2014) The surveys or collection methods are carried out or defined differently depending on the data provider. In this context, we recommend referring to the definition of the cited source in each case.3.6 Ratio of Chain Stores
The ratio of chain stores indicates how high the share of businesses belonging to chain stores is in the total number of retail businesses in a spatially defined area (e.g., a street, the city centre or a district). (According to gif Gesellschaft für Immobilienwirtschaftliche Forschung e. V., Definitions for Retail Analysis 2014) Depending on the data provider, the calculation basis of the market segment and/or the calculation method differ from the gif definition. In this context, we refer in each case to the definition of the cited source.3.7 Purchasing Power
Purchasing Power Purchasing power indicates the amount of goods and services that can be purchased with one monetary unit and represents disposable income. We depict purchasing power in total in € million, per inhabitant in €, as purchasing power per household in € and by household size. As an additional value, we provide the purchasing power index (GER = 100), which makes it possible to compare the purchasing power of a specific region with the national or international average. (Source Nexiga 2020) Retail-relevant purchasing power Of the total available purchasing power of a household or a person, only a part is spent in retail. In particular, expenditure on rent, mortgage interest, insurance, travel or services is not relevant when determining retail purchasing power, as such expenditure is not retail-related. (source gif e.V.) We map the total retail-relevant purchasing power in € million and per inhabitant in €. As an additional value, we provide the retail-relevant purchasing power index ( BRD = 100), which makes it possible to compare the retail-relevant purchasing power of a specific region with the national or international average. (Source Nexiga 2020) Retail Turnover Ratio In contrast to retail-relevant purchasing power, retail turnover ratio records the purchases made at the consumer’s place of purchase, as it measures the sales made in the local retail trade. The definition used for the calculation is the turnover achieved in stationary retail trade at retail prices. We show the turnover ratio in total in € million and per inhabitant in €. As an additional value we provide the turnover index (GER = 100), which makes it possible to compare the retail turnover ratio of a specific region with the national or international average. (Source Nexiga 2020) Purchasing Power Retention in Retail The relationship between retail turnover and retail-relevant purchasing power is used to calculate purchasing power retention. This identifies spatial units with an inflow or outflow of purchasing power. The resulting centrality index is shown as a per capita index (BRD = 100) and indicates the degree of attractiveness (“magnetic effect”) of a spatial unit for its surrounding area. (Source Nexiga 2020) Consumer Purchasing Power Consumer purchasing power describes the income of private households that remains for consumption purposes after deducting all regular payment obligations. We show the total consumer purchasing power in € million, per inhabitant in €, as consumer purchasing power per household in € and by household size. As an additional value, we provide the consumer purchasing power index (GER= 100), which makes it possible to compare this purchasing power factor of a specific region with the national or international average. (Source Nexiga 2020) Purchasing power for daily consumer goods We map the purchasing power for consumer goods in total in € million, per inhabitant in €, as purchasing power per household in € and by household size. As an additional value, we provide the purchasing power index (GER= 100), which makes it possible to compare the purchasing power of a specific region with the national or international average. (Source Nexiga 2020)4.1 Tourism
Overnight Stays “This is the number of overnight stays by persons who stayed overnight in accommodation establishments during the calendar year, i.e., occupied sleeping accommodation for a temporary stay.” (Source: Statistical Offices of the Federal Government and the Federal States 2019) Guest Arrivals “This is the number of guests who arrived at accommodation establishments during the calendar year and occupied sleeping accommodation for a temporary stay.” (Source: Statistical Offices of the Federal Government and the Federal States 2019) Share of International Tourism Share of international guests in total guest arrivals in % (Source: Statistical Offices of the Federal Government and the Federal States 2019) Length of Stay The average length of stay is defined as the quotient of the number of overnight stays and the number of arrivals in the respective reporting period and is given in days. (Source: Statistical Offices of the Federal Government and the Federal States 2019) Tourism Index Number of guest beds per 1,000 inhabitants per municipality. (Source: Statistical Offices of the Federal Government and the Federal States 2019)4.2 Hotel
Accommodation Establishments “Accommodation establishments which temporarily accommodate at least 10 guests (in tourist traffic) at the same time. This also includes accommodation establishments that provide accommodation for guests on a non-commercial basis and/or only as a secondary occupation. Accommodation establishments include hotels, hotels garnis, inns, guesthouses, recreation and holiday homes, educational accommodation, holiday homes and holiday flats, holiday centres, mountain huts, youth hostels and youth hostel-like establishments, campsites as well as preventive care and rehabilitation clinics.” (Source: Statistical Offices of the Federal Government and the Federal States 2019) Number of Guest Beds “Guest beds are the number of beds and other sleeping facilities offered in the accommodation establishments which are open (excluding campsites). The number of beds on offer refers to the accommodation facilities as they were at the end of July.” (Source: Statistical Offices of the Federal Government and the Federal States 2019)4.3 Occupancy
The average occupancy rate or occupancy describes the proportion of rooms sold by an establishment in a given period and is expressed as a percentage and is calculated as follows: Occupancy = rooms sold/rooms available4.4 RevPar
This is the revenue per available room in €, it is calculated as the quotient of the total room revenue to the number of available rooms.4.5 ADR
It is the average daily price per room sold, it is the quotient of the room revenue and the number of rooms sold per day.4.6 ARR
It is the average room rate for rooms sold in a given period and is the quotient of room revenue and the number of rooms sold.4.7 Prime Yield
Prime Yield The prime yield for hotel properties corresponds to the (gross) initial yield for properties of top quality and with top facilities. (Source Colliers International) Volume of Transactions The transaction volume is the sum of all registered hotel investments in a certain period and is stated in €.Prime Rent
The basis for calculating the market segment and/or the calculation method differ depending on the data provider or are not defined in more detail. In this context, we refer in each case to the definition from the cited source. The data provider Jolas Consult calculates rent prices as medians of asking rent prices in sqm gross floor area (GFA). In addition to comparable property types and locations, comparable land values are also used. The median is derived from at least 5 comparable buildings with modern amenities. They are available for logistics and commercial properties at district level for independent cities. (Source: Jolas Consult)Minimum Rent
The basis for calculating the market segment and/or the calculation method differ depending on the data provider or are not defined in more detail. In this context, we refer in each case to the definition from the cited source. The data provider Jolas Consult calculates rent prices as medians of asking rent prices in sqm GFA, using comparable property types and locations as well as comparable land values. The median is derived from at least 5 comparable buildings with basic amenities. They are available for logistics and commercial properties at district level for independent cities. (Source: Jolas Consult).Average Rent
The basis for calculating the market segment and/or the calculation method differ depending on the data provider or are not defined in more detail. In this context, we refer in each case to the definition from the cited source. The data provider Jolas Consult calculates rent prices as medians of asking rent prices in sqm GFA, using comparable property types and locations as well as comparable land values. The median is derived from at least 5 comparable buildings with functional amenities. They are available for logistics and commercial properties at district level for independent cities. (Source: Jolas Consult).Prime Yield
The basis for calculating the market segment and/or the calculation method differ depending on the data provider or are not defined in more detail. In this context, we refer in each case to the definition from the cited source. The term yield in this context corresponds to the reciprocal value of the net multiplier (total purchase price to annual rental income). The peak factor thus describes the highest multiplier achievable on the market and sets the net rental income in relation to the gross purchase price (= purchase price incl. incidental acquisition costs). As a rule, the prime refers to a new building (completed within the last two years) with the best location conditions and if the building is fully let to top tenants on a long-term basis at the current prime rent. (Source: DIP Deutsche Immobilien-Partner, among others).Land Prices Min./Max.
The basis for calculating the market segment and/or the calculation method differ depending on the data provider or are not defined in more detail. In this context, we refer in each case to the definition from the cited source. As a rule, the land prices are based on so-called standard land values, which are the medians of all land values within the local authority in commercial and industrial areas. They are stated in €/sqm of floor space as both lower and upper price segments. The land values are not comparable with the standard land values.Take-up
The basis for calculating the market segment and/or the calculation method differ depending on the data provider or are not defined in more detail. In this context, we refer in each case to the definition from the cited source. Take-up is the sum of all space let within the period under consideration. This also includes logistics space taken up by an owner-occupier. Take-up is usually expressed in square metres of gross floor area or floor space.Volume of Transactions
The basis for calculating the market segment and/or the calculation method differ depending on the data provider or are not defined in more detail. In this context, we refer in each case to the definition from the cited source. Transactions describe buying and selling activities on the investment market for real estate used for warehousing, order processing and distribution of goods. The volume of transactions is the sum of the purchase prices paid per period in €.
The basis for calculating the market segment and/or the calculation method differ depending on the data provider or are not defined in more detail. In this context, we refer in each case to the definition from the cited source.
6.1 Residential
Supply Housing Market
The housing supply describes the number of all apartments existing in a regionally defined area on a certain reference date, both in residential and non-residential buildings. In residential buildings, the housing supply is again differentiated according to the type of construction, namely between the number of apartments in residential buildings with 1-2 apartments (apartments in detached and semi-detached houses) and the number of apartments in residential buildings with 3 and more apartments (apartments in a multi-storey building). The housing supply provides information on the size of the spatially and time-related housing supply (no information on whether it is occupied or unoccupied). (Source: Statistical Offices of the Federal Government and the Federal States 2019/ www.wohnungsmarktbeobachtung.de)Building Permits
Building permits are understood to be “building measures requiring approval or consent, as well as those requiring disclosure or notification, or those subject to a permit exemption procedure”. This includes buildings and apartments. (Source: Statistical Offices of the Federal Government and the Federal States 2019)Construction Measures
Construction measures describe all structural changes to existing residential and non-residential buildings through conversion, extension, expansion (e.g., annex or adding another storey) as well as restoration measures. In the case of construction measures on existing buildings, apartments may not only be newly created, but may also be eliminated (e.g., by merging apartments).Construction Completions
Construction completions are understood to be the completions of “construction measures requiring approval or consent, as well as those requiring disclosure or notification or subject to an approval exemption procedure”. (Source: Statistical Offices of the Federal Government and the Federal States 2019)Residential Buildings
“Residential buildings are buildings where at least half (measured by the share of living space in the total usable space) is used for residential purposes. Residential buildings also include residential homes.” These are shown in total and according to the number of apartments in the building. (Source: Statistical Offices of the Federal Government and the Federal States 2019)Non-residential Buildings
“Non-residential buildings are buildings that are predominantly (more than half of the total usable floor space) used for non-residential purposes. These include, for example, institutional buildings, office and administrative buildings, agricultural and non-agricultural business buildings (e.g., factory buildings, hotels)”. (Source: Statistical Offices of the Federal Government and the Federal States 2019) Apartments “Apartments are defined as rooms which are adjoining one another and self-contained, intended for residential purposes and which allow for the running of a private household. In principle, an apartment has its own entrance which can be locked directly from the outside, from the staircase or from a hallway, as well as a water supply, sink and toilet. However, the apartment may also include basement or attic rooms that are located outside the actual apartment unit and that have been converted for residential purposes. Starting from reporting year 2012, “other apartment units” (i.e., apartment units without a kitchen or permanently installed cooking facilities) are also considered to be “apartments”.” Approved apartments are specified both in total and by number of rooms in the apartment (1 room to 3 rooms and more). Rooms are defined as all rooms intended for living purposes such as living rooms, dining rooms, bedrooms and other separate rooms (e.g., habitable basement and attic rooms) of at least 6 m² living area as well as self-contained kitchens regardless of their size. A living room with a dining area, bedroom or kitchenette is counted as one room. Bathroom, toilet, hallway and utility rooms are generally not counted. (Source: Statistical Offices of the Federal Government and the Federal States 2019) Living Space in Residential Buildings The living space in residential buildings is the sum of all calculable floor areas of the rooms that belong exclusively to an apartment. This includes the areas of living rooms and bedrooms, kitchens and ancillary rooms (hallways, storage rooms, bathrooms, proportionate balconies/loggias, etc.). In residential homes, the floor area of rooms intended for sole and common use by the residents is defined as living space. Areas such as cellars, laundry rooms, attics, boiler rooms, garages, etc. are not included. The living space is given in 1,000 m². (Source: Statistical Offices of the Federal Government and the Federal States 2019)6.2. Housing Demand
The housing demand forecast by empirica regio describes the additional demand for housing due to the increase in households demanding housing, caused by changes in the number of inhabitants, household sizes and the age distribution of households. The forecast does not take into account whether there is a shortage of apartments in certain price segments. Rather, it analyses how many additional dwellings are needed due to (regionally) increasing household numbers. In such forecasts, it is assumed that the dwellings will also be affordable (again) if sufficient numbers are built. The need for additional housing is forecast in number of dwellings as well as in number of dwellings per 1,000 inhabitants in a lower, middle and upper scenario for independent cities as well as for all districts until 2035. (Source and further information on methodology: empirica regio/ empirica housing market forecast 2022/23).6.3 Rents Overview
Apartments (average rent)
The rents are the asking rent prices (advertised rents) calculated by empirica regio hedonically, i.e., quality-adjusted, for a representative residential unit (apartment 60-79 sqm or detached house 125 sqm) for all years of construction and with high-end fittings. The rents are given in €/sqm/month (basic rent exclusive of utilities) and are available at district level and for all independent cities as quarterly values and are updated four times a year. In addition, the relative change in rents is shown as an index (Index Germany = 100). (Source: empirica regio). GEWOS obtains the listing data from the leading real estate portal Immoscout24 and calculates the median asking rent prices per m² for existing (built more than 3 years ago) and newly constructed apartments in the independent cities. (Source: GEWOS)Affordability of Asking Rent Prices
The affordability of asking rent prices is the ratio of the average asking rent level per independent town or district in a given year to the disposable income of households per inhabitant. Disposable income is the income available to private households for consumption purposes and savings. An affordability of e.g., 33% means that 33% of disposable income has to be spent on (asking) rent. (Source: GEWOS)6.4 Rents for New Constructions
Total Rents for New Constructions (average) All new-construction rents are advertised rents (asking rent prices) and are presented by empirica regio hedonically, i.e., quality-adjusted for a representative residential unit (apartment 60-79 sqm/ detached house 125 sqm), with a construction year within the last ten years (new build) and with high-end fittings. They are given in €/sqm/month (basic rent exclusive of utilities) and are available at district level and for all independent cities as quarterly values. The data is updated four times a year. In addition, the relative change in rents is shown as an index (Index Germany = 100). (Source: empirica regio). GEWOS obtains the listing data from the leading real estate portal Immoscout24 and calculates the median asking rent prices per m² for newly constructed apartments in the independent cities. (Source: GEWOS)6.5 Current Rents
Total Current Rents (Average)
empirica regio defines the multiplier as the ratio of quality-adjusted rental and purchase prices per 60-79 sqm residential unit, for all years of construction and high-end fittings. It is calculated as follows: Purchase price/annual rent. empirica regio distinguishes between the multiplier overall, the multiplier for new housing construction (housing units not older than ten years) and the multiplier for the housing stock and is calculated nationwide at district level and for the independent cities. (Source: empirica regio) The multiplier from GEWOS indicates how many years it takes for the acquisition costs for a property to be recouped through rental income. A multiplier of e.g., 20.0 means that 20 years are needed to refinance the property purchase price through rental income. The multiplier was calculated for the second quarter of 2019. (Source: GEWOS)Gross Initial Yield
empirica regio defines the gross initial yield as the ratio between initial rental income and purchase price of the rented apartment. Since very few of the apartments advertised for sale include the current rental income in addition to the purchase price, the mean, quality-adjusted rental price of all rented apartments is set here in relation to the mean, quality-adjusted purchase price of all owner-occupied apartments (cf. multiplier); the reciprocal value is the yield. empirica regio differentiates here between the gross yield overall, the gross yield for new housing construction (housing units not older than ten years) and the gross yield for the housing stock. It is given in % and calculated nationwide at the district level and for the independent cities. (Source: empirica regio) The gross initial yield calculated by GEWOS is the annual profit that can be generated with a property. The values given refer to rented apartments. (Source: GEWOS)6.6 Purchase Price Overview
Multiplier
empirica regio defines the multiplier as the ratio of quality-adjusted rental and purchase prices per 60-79 sqm residential unit, for all years of construction and high-end fittings. It is calculated as follows: Purchase price/annual rent. empirica regio distinguishes between the multiplier overall, the multiplier for new housing construction (housing units not older than ten years) and the multiplier for the housing stock and is calculated nationwide at district level and for the independent cities. (Source: empirica regio) The multiplier from GEWOS indicates how many years it takes for the acquisition costs for a property to be recouped through rental income. A multiplier of e.g., 20.0 means that 20 years are needed to refinance the property purchase price through rental income.Gross Initial Yield
empirica regio defines the gross initial yield as the ratio between initial rental income and purchase price of the rented apartment. Since very few of the apartments advertised for sale include the current rental income in addition to the purchase price, the mean, quality-adjusted rental price of all rented apartments is set here in relation to the mean, quality-adjusted purchase price of all owner-occupied apartments (cf. multiplier); the reciprocal value is the yield. empirica regio differentiates here between the gross yield overall, the gross yield for new housing construction (housing units not older than ten years) and the gross yield for the housing stock. It is given in % and calculated nationwide at the district level and for the independent cities. (Source: empirica regio) The gross initial yield calculated by GEWOS is the annual profit that can be generated with a property. The values given refer to rented apartments. (Source: GEWOS)6.7. Purchase Price Overview
Owner-Occupied Apartments (average)
The purchase prices presented by empirica regio are quality-adjusted advertised asking prices (hedonic prices) for an apartment (60-79 sqm) or a house (detached 125 sqm) of all construction years (new and existing) and with high-end fittings. The purchase prices are given in €/sqm or per dwelling unit and are available at district level and for all independent cities as quarterly values. They are updated four times a year. In addition, the relative change in prices is shown as an index (Index Germany = 100). (Source: empirica regio). GEWOS obtains the listing data from the leading real estate portal Immoscout24 and calculates the median asking prices per m² for existing (built more than 3 years ago) and newly constructed apartments in the independent cities. (Source: GEWOS)Housing Prices and Profitability
Property prices and profitability are framework conditions that have a major influence on the investment decision. To map this sector, GEWOS has used the GEWOS Purchasing Power Property Price Index for owner-occupied apartments KPI, the affordability of asking rental prices and the current multiplier. The three factors flow equally into the assessment of property prices and profitability. (Source: GEWOS)Real Estate Price Index for Owner-Occupied Apartments (KPI)
The GEWOS KPI represents the relation of the average available purchasing power per household and the average price for an owner-occupied apartment. (Source: GEWOS)6.8 New Construction Purchase Prices
New Construction Purchase Prices in Total (average)
The purchase prices for new construction presented by empirica regio are quality-adjusted advertised asking prices (hedonic prices) for an apartment (60-79 sqm) or a house (detached 125 sqm) built within the last ten years (new construction) and with high-end fittings. The purchase prices are given in €/sqm or per residential unit and are available at district level and for all independent cities as quarterly values. They are updated four times a year. In addition, the relative change in prices is shown as an index (Index Germany = 100). (Source: empirica regio). GEWOS obtains the listing data from the leading property portal Immoscout24 and calculates the median asking prices per m² for newly constructed apartments in the independent cities. (Source: GEWOS)6.9 Current Purchase Prices
Current Purchase Price in Total (average)
The purchase prices for new buildings presented by empirica regio are quality-adjusted advertised asking prices (hedonic prices) for an apartment (60-79 sqm) or a house (detached 125 sqm) built more than ten years ago (stock) and with high-end fittings. The purchase prices are given in €/sqm or per residential unit and are available at district level and for all independent cities as quarterly values. They are updated four times a year. In addition, the relative change in prices is shown as an index (Index Germany = 100). (Source: empirica regio). GEWOS obtains the listing data from the leading property portal Immoscout24 and calculates the median asking prices per m² for existing properties (built more than 3 years ago) in the independent cities. (Source: GEWOS)6.10 WohnInvestmentProspect (WIP)
WohnInvestmentProspect (WIP)
The WohnInvestmentProspect (WIP) – a GEWOS product – offers analyses of investment opportunities and risks in residential real estate for all of Germany’s independent cities.Investment Opportunities
Investment opportunities have been calculated in recent years according to the following factors:- Ratio between housing supply and demand until 2030
- Development of economic performance in recent years
- Change in affordability of rental and owner-occupied housing